Authenticity and competitive price have always been the major concerns for China’s online luxury consumers, but now retailers might want to add style to the recipe.
On Tuesday, flash luxury sales site Mei.com held a pre-launch event for its annual “916” shopping festival, a three-day shopping extravaganza from Sept 16 to 18.
With the theme “Explore your own style,” the event kicked off the opening of a high-tech virtual reality fashion center in Shanghai. At the center, visitors can experience different styles through VR eyewear, try on various looks, and play with a 360-degree mirror installed with cameras.
Actress and style icon Carina Lau joined the crowd in the experience center on Tuesday night.
While the platform used to focus more on finding the right brands and products, it now tries to enhance the customer experience with more fashion-focused approaches, says Thibault Villet, the CEO and founder of Mei.com.
“Instead of a shopping festival, we want to make it more experiential,” he says.
“What [has been] happening in the market in the past few years is that customers are exposed to more brands. As they get more sophisticated, they are leveraging fashion to express themselves. We try not to focus so much on price, but on added value.”
Brands from Mei.com, including Theory, Guerlain, Lottusse, Ray-Ban, La Perla, and Kerastase, have been taking turns to introduce their products, history, and styling tips in the fashion center between Sept 14 to 16.
The event follows Mei.com’s star-studded, interactive fashion show in March. In collaboration with Alibaba’s Tmall platform, the show allowed people to watch it live online and order at the same time.
Alibaba made an estimated $100 million investment in Mei.com last year. The site now has its own channel on Tmall and manages flash sales of selected brands on the platform.
While Tmall looks to edge up its competitiveness in luxury and fashion through the collaboration (Mei.com works directly with more than 2,000 brands), Mei.com wanted to leverage the huge user base of Tmall to find new customers, especially in lower-tier cities.
During the “618” online shopping festival this year, Mei.com’s sales in June soared 70 percent year-on-year, and half of the buyers are new customers recruited from Tmall.
Among the new customers, about half are from Tier 2 and 3 cities. These customers are especially drawn to bags and accessories from affordable luxury brands like Kate Spade, Michael Kors, and Furla, says Villet.
So far, Mei.com has has recorded more than 900,000 customers. Villet expects the number to reach 1 million by the end of the year with the upcoming shopping festivals on both Mei.com and Tmall.
“Our business is increasing through stages. Each festival allows us to recruit customers. Our strategy is to move them to Mei.com so they can have daily visits to our app and have access to our magazine,” Villet says.
The platform publishes a digital magazine on its app to provide fashion and styling information on a daily basis. About 80 percent of its sales come from its mobile apps as of February.
The partnership with Alibaba has also allowed access to technologies that can personalize the shoppers’ experience by pushing the right brands to the right target audience based on their shopping and viewing history.
“Our company was built on merchandising and marketing, but we were not advanced in technology. Since we have been partnering with them, we have quartered up and will become even more advanced in the future,” says Villet.
With Alibaba backing up its IT infrastructure, the site recently started its cross-border business with bonded warehouses in the Shanghai Free Trade Zone and Hong Kong.
Having been on trial on Tmall for four months, the cross-border service will be launched on Mei.com on September 16.
Although it seems a bit late to venture into cross-border e-commerce, Villet says he sees it more as an additional way to grow the business.
“It’s an extension of the business, not a new cross-border e-commerce platform. We see it as an opportunity to serve the customer better, because we have requests from both our old customers and brands which don’t have operations in China.”
The platform now offers cross-border service of goods below 2,000 yuan ($300), as the government imposed in April stricter standards of tax on overseas purchases over 2,000 yuan.
Villet expects the cross-border segment to take 5 to 10 percent of the site’s turnover in the next 12 months, in line with the industry trend.
China’s cross-border consumer e-commerce totaled at an estimated 259 billion yuan in 2015, making up more than 6 percent of the total value of national consumer e-commerce. It is expected to grow at more than 50 percent annually, according to McKinsey.